Earnings season really kicks into high gear this week with over 900 companies expected to report including several of the Magnificent 7 companies and dozens of other S&P 500 companies as well.Every sector will be represented but investors may want to tune into the homebuilders this week. The homebuilders have staged a massive first half rally, after bottoming out last year.But over the last 3 months, many homebuilders have retreated from recent highs, with several actually falling over 20%, putting them into a bear market.
Are 8% Rates Going to Cool the Housing Market?
Wall Street is worried about 8% mortgage rates. Remember, the builders have the ability to buy down the mortgage rates for buyers, although that will impact earnings. Earlier in the year, there weren’t many takers, but has that changed this fall?The homebuilders have excellent earnings surprise track records. And they’re cheap, with forward P/Es under 10.
5 Homebuilders to Watch This Week
1. PulteGroup, Inc. (PHM – Free Report)PulteGroup will lead off the earnings in the homebuilders this week, with earnings in the morning of Oct 24, 2023. PulteGroup has only missed twice in the last 5 years but one of those was in the last year.Shares of PulteGroup are down 9.4% off the recent highs. It’s still cheap, with a forward P/E of 6. PulteGroup also pays a dividend, yielding 0.9%.Will PulteGroup, as the largest of the publicly traded homebuilders, set the tone this week?2. M/I Homes, Inc. (MHO – Free Report)M/I Homes has an excellent earnings surprise track record. It has only missed twice in the last 5 years, once in 2020 and once in 2021.Shares of M/I Homes had been at new 5-year highs earlier this year but in the last 3 months, they’re down 15.7%. M/I Homes is dirt cheap, with a forward P/E of just 4.4.Is M/I Homes too cheap to pass up?3. M.D.C. Holdings, Inc. (MDC – Free Report)M.D.C. Holdings has beat 2 out of the last 4 quarters. It pays the highest dividend in the industry, which is currently yielding 5.5%.Shares of M.D.C. Holdings are down 19% in the last 3 months. It’s cheap, but not as cheap as M/I Homes. It trades with a forward P/E of 7.5.Is it time to put M.D.C. Holdings on your short list?4. Taylor Morrison Home Corp. (TMHC – Free Report)Taylor Morrison has beat 8 quarters in a row. Impressive. It has also only missed twice in the last 5 years. Those 2 misses were in 2021.Shares of Taylor Morrison are down 20% over the last 3 months. That is coming off of the 5-year highs. Taylor Morrison is cheap, with a forward P/E of just 5.5.Should Taylor Morrison be on your watch list?5. Tri Pointe Homes, Inc. (TPH – Free Report)Tri Pointe Homes has only missed once in the last 5 years and it was in 2019. That’s an impressive record considering the pandemic through the housing market for a loop.Shares of Tri Pointe Homes are up 62.9% in the last year, but have sold off 22% in the last 3 months. Like the other homebuilders, Tri Pointe Homes is cheap. It trades with a forward P/E of just 8.Is it time to take a closer look at Tri Pointe Homes?Video Length: 00:10:13More By This Author:3 Value Stock Screens: Which One Is Best?
Stocks On Sale: How Low Will They Go?
What Earnings Data Tells Us
